Merzier v Allstate Ins. Co.

[*1] Merzier v Allstate Ins. Co. 2009 NY Slip Op 50259(U) [22 Misc 3d 1124(A)] Decided on February 18, 2009 Supreme Court, Kings County Kramer, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 18, 2009
Supreme Court, Kings County

Martha Merzier, Plaintiff,

against

Allstate Insurance Co., Defendant.



7426/06



Plaintiff was represented by Berson & Budashewitz, LLP, 15 maiden Lane, NY, NY 10038. Defendant was represented by the Law Offices of Curtis, Vasile, PC, 2174 Hewlett Avenue, PO Box 801, Merrick, NY 11566.

Herbert Kramer, J.

Upon the foregoing papers, plaintiff Martha Merzier (Merzier) moves for an order, pursuant to CPLR 3212, granting summary judgment and payment for the full amount of the unsatisfied judgment in a prior action. Defendant Allstate Insurance Co. (Allstate) also moves for an order, pursuant to CPLR 3212, granting summary judgment and dismissing plaintiff's complaint and all other claims against it.

Background Facts and Procedural History

Merzier was injured on March 8, 2000 when she fell on the first floor of the two- family premises located at 1258 Rogers Avenue, Brooklyn, New York, a building owned by her sister, Olvie Vincent (Vincent), with whom Merzier shared the second floor. Paulette Gayot, another sister of Vincent, occupied the first floor. Allstate insured the premises at issue under a policy in Vincent's name on the date of the accident. Merzier allegedly placed Allstate on notice of the accident and claim by letters dated June 14, 2000 and September 12, 2002. Merzier thereafter commenced an action against Vincent on March 4, 2003 for the injuries she suffered as a result of the accident. Vincent allegedly placed Allstate on notice of that lawsuit on or about March 21, 2003.

Allstate disclaimed coverage by a letter dated April 3, 2003, citing two grounds: (1) the insured's (i.e., Vincent's) alleged failure to promptly report the claim, and (2) application of its resident relative exclusion. Allstate invoked this latter ground after its investigation revealed that Merzier is Vincent's sister and that she allegedly resided in [*2]Vincent's household on the date of the accident under arrangements that would exclude her from coverage under the policy. Vincent did not file an answer and a default judgment eventually resulted against her, Ms. Gayot, and Augustin Vincent on November 17, 2004.

Judgment was entered for $375,285 at a subsequent inquest and served on Olvie Vincent, Ms. Gayot, and Augustin Vincent as well as Allstate on March 2, 2006. It presently remains unsatisfied. Merzier then commenced this action on or about March 8, 2006, pursuant to Insurance Law § 3420 (a) (2), to recover the full amount of the unsatisfied judgment from Allstate.

The Parties'PositionsMerzier argues in her motion for summary judgment that: (1) Allstate untimely disclaimed coverage because no explanation is given for Allstate's nearly three-year delay in responding to her June 14, 2000 notification; (2) Allstate's affirmative defense based on Vincent's failure to put it on notice of the loss is not effective against Merzier; and (3) Merzier has a cause of action against Allstate independent of the insured's standing. Merzier further argues that Allstate's household resident relative exclusion does not apply to her because of her separate living arrangements.

Allstate argues in opposition to Merzier's motion and in support of its own motion for summary judgment that it properly disclaimed coverage due to Vincent's untimely notice of the claim, aside from any proof regarding Merzier's allegedly diligent and expeditious delivery of notice. It also asserts having properly disclaimed coverage under the resident relative exclusion provision because plaintiff's living arrangements with Vincent are not sufficiently separate.

Discussion

Plaintif f's Motion for Summary Judgment

The moving party on a motion for summary judgment has the burden of demonstrating "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case ." (Winegrad v New York Univ. Med. Center, 64 NY2d 851, 852 [1985]). The burden of proof shifts, once the movant has made this showing, to the party opposing the motion, who must produce evidentiary proof in admissible form to establish that material issues of fact exist which require a trial (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]).

Timely Notice

Here, Merzier is not entitled to summary judgment because there remain questions of fact whether she provided Allstate with timely and/or sufficient notice of her claim. Merzier argues that the letters sent to Allstate were timely, but the parties disagree, among other things, whether the first letter was actually mailed, when the letters were received, and whether plaintiff made diligent and reasonable efforts to notify defendant. [*3]In addition, questions of fact exist whether Merzier's letters provided sufficient notice of her claim, given the disagreement over whether misspelling the first name of the insured would still enable an Allstate claims adjuster to identify the corresponding policy. Resolving this issue will also determine the timeliness of Allstate's disclaimer of coverage.

Resident Relative Exclusion

At best, other material questions of fact remain when viewing the facts in the light most favorable to the non-movant (see Gant v Sparacino, 203 AD2d 515 [1994]; Steve's Pier One v. Insurance Co. of N. Am. 131 AD2d 834 [1987]). For example, an issue exists whether to exclude Merzier from coverage under the resident relative provision of Allstate's insurance policy. That provision applies to the insured's relatives who reside within the same household. Plaintiff argues that she and Vincent maintain separate households. She mentions that she rents a room as Vincent's "tenant" and contends that they have separate belongings and living arrangements. However, defendant presents case law, as discussed below, suggesting the need for a higher degree of separation to determine that plaintiff and her sister do not share a household. Such law at least negates summary judgment for Merzier.

Defendant Allstate's Motion for Summary Judgment

Timely Disclaimer

The uncertainty in the record regarding which date Allstate received notice of plaintiff's claim, as discussed above, and the resulting impact on the timeliness of Allstate's disclaimer letter equally warrant denying Allstate's summary judgment motion on the same basis. Indeed, the disclaimer letter's "timeliness . . . is measured from the point in time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage" (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69 [2003], quoting Matter of Allcity Ins. Co. [Jimenez], 78 NY2d 1054, 1056 [1991], rearg denied 79 NY2d 823 [1991]). Here, the issue whether Allstate disclaimed coverage in a timely fashion remains unclear, which prevents granting summary judgment on this basis.

Resident Relative Exclusion

However, Merzier significantly shares an apartment with her sister, Vincent, the insured, and is thereby excluded from coverage under Allstate's policy as a resident relative. Courts have found separate households where individuals live in separate apartments within the same building, have their own kitchen and bathroom, pay separate utility bills, and enter through separate locked doors (see Matter of Hartford Ins. Co. of the Midwest v Casella, 278 AD2d 417 [2000]; General Assur. Co. v Schmitt, 265 AD2d 299 [1999], lv denied 96 NY2d 710 [2001]).

Plaintiff argues that her household is separate from Vincent's household because she merely pays rent for a room within that apartment, and they both had separate rooms, [*4]cookware, mealtimes, and shopping arrangements. Nonetheless, the sisters shared the remainder of the premises, and plaintiff's deposition testimony demonstrates that they shared the kitchen and bathroom facilities, the living room, gas and electric connections, telephone service, and a common entrance to the apartment. Furthermore, only Vincent paid the utilities bills and financed repairs to the premises; plaintiff did not receive separate bills. Thus, plaintiff was a relative who resided within the same household as the insured and is therefore excluded from coverage under Allstate's policy. Accordingly, it is

ORDERED that Merzier's motion seeking summary judgment is denied; and it is further

ORDERED that Allstate's motion seeking summary judgment and dismissing plaintiff's complaint is granted.

This constitutes the decision and order of the court.

E N T E R,

J. S. C.